Wax off Wax On – Waffling – Mr. Miyagi President?

Government Cuts – Lots of Bye-Bye Notes.

Economics and the latest employment report.

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Warm-Up
- Wax off Wax On - Waffling - Mr. Miyagi President?
- Government Cuts - Lots of Bye-Bye Notes
- Economics are in.... People happy and not happy
- Musk - let's talk about this ....
- Praying for the turtles...

Markets
- Lots of Tumult - confusion but still a retail bid
- Inflation numbers are not worrying (to some)
- Employment Report
- CPI Due this week
- Tariffs on Steel and Aluminum

The Karate Kid: Danielson - Wax On Wax off
- Trump 2.0: President Miyagi: tariffs on, tariffs off (used to be called waffling)
- Mexico and Canada Tarrifs are postponed for a month after "phone calls" from Trudeau and Sheinbaum
- China 10% tariffs and now China retaliates
--- Supposedly there is a call set up between Trump and XI in the next few days

Economics
- ADP: Private sector companies added more jobs than expected in January
-- Companies created a net 183,000 jobs on the month, slightly more than the 176,000 in December
---Pay for workers who stayed in their jobs grew at a 4.7% annual rate
- BLS Payrolls: 143k Added, (shy of estimates)
---- URate 4%
----Avg Hourly Earnings kick up to 0.5% MoM
- - - UMICH for Feb - 67.8 (DOWN from 70.1
- ISM Serices 52.8, down slightly from prior month

Color on Confidence numbers
- Lots of concern over the potential for inflation in the UMich report
--- Biggest issue is the worry about the tariffs and how they may impact prices

Earnings:
- The S&P 500 is reporting a 13.2% year-over-year earnings growth rate for Q4 2024, which is the highest growth rate reported in three years
- 77% of S&P 500 companies have reported earnings above estimates, which is equal to the 5-year average but above the 10-year average
- The Financials, Communication Services, Information Technology, Consumer Discretionary, and Utilities sectors are reporting double-digit earnings growth
- Starting to seeing some issues in the BIG tech sector - that is why all of a sudden we are also seeing layoffs - expense cutting (although no cuts to cap ex at this point)

Earnings
- Amazon prelim Q4 $1.86 vs $1.49 FactSet Consensus; revs $187.79 mln vs $187.31 bln FactSet Consensus
- AWS segment sales rose 18.9% yr/yr to $28.79 bln
- Q4 operating income of $21.2 bln vs prior guidance of $16-20 bln; guides to Q1 operating income of $14-18 bln
- Amazon sees Q1 revs $151.0-155.5 bln vs $158.56 bln FactSet Consensus
----Amazon expects $100 billion of capex in 2025 on 'once-in-a-lifetime' AI opportunity

More Earnings
- Alphabet shares fell more than 9% in after-hours trading Tuesday after the company reported fourth-quarter results that missed on revenue expectations and announced more artificial intelligence investments.
- Earnings per share for the Google parent company beat analysts' estimates by two cents.
- Revenue: $96.47 billion vs. $96.56 billion expected by LSEG
- Earnings per share: $2.15 vs. $2.13 expected by LSEG

Even More Earnings
- Advanced Micro Devices reported fourth-quarter results on Tuesday that beat Wall Street expectations for sales and earnings, but the stock fell about 5% in extended trading as the company missed estimates in its key data center segment.
- Stock kept of falling in the days after too...
- Earnings per share: $1.09, adjusted, versus $1.08 expected
- Revenue: $7.66 billion versus $7.53 billion
--- Clearly this company was way ahead of itself and proposing that they had AI chips that were potentially competitive to NVDA - BUT NOT!

Spotify
- Stock moved up nicely last week after a really good earnings report
- Shares climbed 10% Tuesday after the music streaming company recorded its first full year of profitability
- Revenue: 4.24 billion euros vs. 4.19 billion euros expected by LSEG
- Earnings per share: 1.76 euros vs.1.99 euros expected from LSEG
- MAUs (monthly active users): 675 million vs. 664.3 million expected by StreetAccount
- The Luxembourg-based company reported a 40% growth year-over-year for gross profit, rising 10% from the previous quarter. Operating income came in at 477 million euros, slightly below guidance.
- $189 back in the start of 2024 - Now.... Over $600

Mo' Money Spend
- Softbank now investing upwards of $40B into OpenAI - now worth $300B
-- Remember, you keep adding money and your money from initial adds is worth more...

Postal Service Suspended
- USPS announced last week that it would stop accepting parcels from China and Hong Kong, until futher notice.
---- That smacked companies in China that do bug retail here in US (PDD, TEMU etc)
- The U.S. Postal Service said Wednesday it will resume accepting inbound mail and packages from China and Hong Kong, just hours after it suspended service from those regions.
- "The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery," the agency wrote in a notice posted to its website.

Sovereign Wealth Fund?
- A sovereign wealth fund (SWF) is a state-owned investment fund that manages a country's financial assets
- These funds are typically derived from surplus revenues from commodity exports (like oil and gas), foreign exchange reserves, or budget surpluses
- The United States is considering establishing its own SWF. President Trump signed an executive order directing the Treasury and Commerce departments to develop a plan for creating such a fund.
- The proposed U.S. SWF aims to promote fiscal sustainability, lessen the tax burden on American families and small businesses, and establish economic security for future generations
- AND they are talking about somehow doing a strategic reserve of Bitcoin.... WTF?

Speaking of Bitcoin
- BIG NEWS - Microstrategy is changing its name to .... Strategy

US Steel Saga
- Seems tht there is little hope of Nippon Steel buying US Steel
- HOWEVER, Nippon Steel is going to invest "heavily" in US Steel now.... (WHY - hopes that one day this will get them control of the company and another administration will then allow the purchase for good behavior?)
- MORE: U.S. President Donald Trump on Sunday told reporters that he planned to announce new 25% tariffs on Monday, targeting imports of steel and aluminum.
- - The proposed levies would be in addition to existing duties. No timeline for implementation was specified at this time.

Bil Ackman - Not Quiet anymore
- Pershing Square’s Bill Ackman revealed Friday that he has built a significant stake in Uber, saying the stock is still trading at a “massive” discount.
- In a post on X, the hedge fund manager said his fund began buying Uber shares in early January and has amassed 30.3 million shares, worth $2.3 billion based on the stock’s current level around $75 per share.
- “We believe that Uber is one of the best managed and highest quality businesses in the world,” Ackman said in t...